THE ACADEMIC SIBERIA OF CORPORATE CRIME CRIMINOLOGY

Prof. Dr. Hans See.

Lecture given for manager on University of Sankt Gallen (12.12. 2011)

Let me begin with an outline of my talk. It is divided into 4 parts.

First, I would like to thank Dr Lara Pair for her invitation and to give you some information about my experiences in being asked as „expert on corporate and business crime”. It is a lesson about
the ideological and political warfare against any kind of opposition to the abuse of capitalistic power in social organised democracies.

Second, I will show you landscapes of academic Siberia. As a scientist, I will introduce you to some problems dealing with crimes committed by the rich and mighty in corporations. Especially I
will tell you about difficulties of researchers who are interested in the practice of non-controlled business power and the abuse of the public trust and money.

Third, I will give you a rough view of the development of social research and studies in corporate crime by criminology, because it is a very important part of understanding the corporate crime
itself. I will introduce you to the studies of Edwin H. Sutherland and to the work of some scientists and journalists who should be seen as his present day successors.

Last, not least I will give you some information about Business Crime Control, the non-government-organisation I founded in 1991 with some friends and experts. Then you will also get some details
about my own theoretical imperatives and political perspectives. Now I will begin with the main part of my lecture.

First Part

As a bridge to the following explanations, that contain the difficulties of researching corporate crime and to spread the results to the public, I repeat once more my thanks to Dr Pair for her
invitation. I never thought I would get the opportunity to give a lecture on the subject of corporate or business crime in any University or Academy in Switzerland or in any University for big
business and international management anywhere. I hope it is the beginning of a new scientific and political era.

I say this not without a sense of quiet irony, because in the past 4 decades of my engagement I very often thought, that this new age I am still waiting for had already begun a long time ago. For
many others and me it was a sensation that I could become a professor of economic criminology in the middle of the 1980s. I can say that I was the first criminologist in Germany with this special
qualification.

We had many criminological Institutes, but they were very interested in the crimes of youth, of drugs, violation, re-socialisation and re-integration. Some were specialized in terrorism, others
in neo-fascism, but also in organized crime and corruption. However, corporate crime was not a problem - at best a marginal one. For a short period, however, so-called „critical criminology” was
paid attention to.

My theoretical perspective in criminology was partly overlapped and integrated into the greater perspective of conflicts of social classes, something Marxism did in its criticism of political
economy. The focus of these critical criminologists was the constant use of lawbreaking by the upper class. These identified law and punishment of crime connected to a system of social inequality
and as a means of producing and perpetuating this inequality.

However, their studies were mainly focused on the problems of the labelling approach. It means: Deviance is not a quality of the act the person commits, but rather a consequence of the
application by others of rules and sanctions to an ‘offender. The deviant is one to whom the label has successfully been applied; deviant behavior is behavior that people so label.” Also the few
studies in corporate crime had been very far from reality and did not reach the public.

Therefore I find it worth mentioning that it was Wolfgang Gerhard, a leading member of the German Free Democrats, when he became Minister for Sciences and Art in the German Regional State Hessen
(1987-1991), who appointed me to become not only a professor of social policy but also of corporate criminology. This sounds unbelievable, but it happened. In fact, it was only an “alibi” because
in theory and practice the economy developed in the opposite direction and nobody was willing to finance my studies in corporate crime.

There were cases of upper class crime enough: I remind you of one of the biggest bribery scandals in Germany, where the established parties and the corporations of the famous Flick-Family were
involved. I remind you of the „Save & Loan-crisis” in the USA, the first big bang, consequence of deregulation-policy pursued by Ronald Reagan and the start of the long chain of bank crashes
from then until today. I mention only the British Barings and the US Lehman Brothers Bank and the series of bank crashes since then.

Nowadays banks don’t really crash; they are saved by the so-called European Rescue Umbrella that costs hundred of billions paid by the taxpayers, who cannot easily escape, but pay the tax. That
is the middle class, the working class and those poor people, who need the support of welfare states but endure cuts in the social services. However, I cannot believe that the unholy alliance of
politics and lawbreaking investors is able to solve the problems. This alliance cannot solve the problems, they are the main part of the problems and they created them.

Remember the great environment-crimes committed in the past 4 decades. I mention only a few you might know: The Contergan-, the Bhopal- and the Seveso-dioxin-disaster. Then the wood preservation
scandal, the Exxon- and BP-catastrophes in Alaska and in the Gulf of Mexico, last not least in 1985 the Tschernobyl- and now the Fukushima crime, horrible crimes of big corporations.

Most of these crimes are played down, however, as accidents. Would these crimes be possible without the great system of corruption that integrates policymakers, politicians and
state-administrators of highest rank in these crimes? I say no. Would the playing down be possible without corrupt journalists and scientists, without newspapers and mass-media being itself big
profit-machines who depend on advertising from business, industry and trade, from banks and other financial institutions and service enterprises?

When I started to find out the perception of corporate crime, organized crime and corruption by German newspapers in the times after World War II, I tried to get money for this project, but
neither the Frankfurt University of Applied Sciences – where I was a scholar from 1976 to 1999 – nor any other institutions were willing to support it. Therefore, I tried an experiment with
students, who for some years analysed in a so-called project-study news and comments concerning corporate crime and cases of corruption. However, all the collected data, beginning in 1945 and
ending in 1968, could never be analysed and published. The reason is simple: No money, no interest in the subject.

The main interest of official criminology, but also of politicians, of newspapers, radio and television stations was in the 1990s, at the end of the cold war, the role of organized crime and
money laundering. Therefore I founded in 1991 the NGO Business Crime Control and focused it on corporate crime. But when in conferences I tried to speak about the corporate crime, there were also
no reactions, no discussions, and no acceptance of my method, to search in corporate crime the main cause of and possibly solve the problem of organised crime, too.

I am convinced that in the years following the collapse of the Soviet-Union organized crime and the great transformation of the state-plan-economies to private dominated free-market economies it
became for the legal corporations a complementary subsystem to realize profits also in the informal, illegal and criminalized markets.

In 1993, I had the chance to read a paper in the Syracuse University in the USA, but in the faculty of Political Sciences, not for students of economy or law. The theme: Corporate Crime and
Democracy. There students feared for democracy, if organized crime could not be stopped. In 1994, I received an invitation for a discussion at one of the main universities in Beijing, where
problems of lawbreaking members of the new upper class became apparent and could no longer be ignored by politicians and scientists.

There, two professors of criminology asked me for hours, how the fight against corporate crime is dealt with in Germany and in the European Union. I was surprised to find out: they feared neither
democracy nor capitalistic economy, but capitalistic democracy. They believed democracy was the reason for corporate crime. In both cases, I tried to explain, that the political class in every
political system could not be interested in fighting against corporate crime. They did not like to hear it.

In the early 1990s, I had a few opportunities in Switzerland to give interviews for Newspapers and the Basel radio, not in any University. I was asked as the founder and chairperson of the NGO
Business Crime Control, not as a corporate criminologist. Some so-called very important persons living in Switzerland became members and friends of our organisation; including the well known Jean
Ziegler and Hans A. Pestalozzi.

Jean Ziegler (born 1934) was a former professor of sociology at the University of Geneva and at the Sorbonne, Paris. He was a Member of Parliament for the Social Democrats in the Federal Assembly
of Switzerland from 1981 to 1999. And he has also held until now several positions with the United Nations. He has, especially in his home-county, powerful enemies, his sharp criticism of banks
and bank policy of Switzerland for 4 decades is not excusable.

Pestalozzi (born in1929 – suicide in 2004) was a Swiss social critic and bestselling author (Nach uns die Zukunft, Auf die Bäume ihr Affen). He studied at the University of St. Gallen, then he
started working for Migros and soon began to climb the career ladder. In the 1960s he built up the Gottlieb Duttweiler Institut, a think tank named after the Migros founder (who had died in
1962). The institute was being established to investigate the range of possible shortcomings and negative effects of capitalism, in particular within Western consumer society, so that they could
be combated more effectively.

In Wikipedia you can read that Pestalozzi fulfilled that task very thoroughly, especially in his lectures, so much so that in 1977 he was fired by Migros Now he became a freelance writer and
self-proclaimed “autonomous agitator” who sided with the fledgling European youth, peace and ecological movements. He preached "positive subversion" and, in a Kantian manner, tried to convince
people that using their own intelligence was the right thing to do. Moreover, he demanded a guaranteed minimum income for everybody.

One of our members was Dr Erich Diefenbacher, a business lawyer who escaped from Switzerland into German exile. He had been attacked by unknown people who wanted to murder him, after he had
attacked the Christian Schmid Crisanus foundation. It is a long and serious story of corporate crime, tax-evasion and violations against civil and human rights I can only mention. Anyone who is
interested to know details can find it all in the internet. It is a great tragedy and shows us the shadowy side of the civilised countries which maintain banking secrecy. They are not only
accessory to huge crimes at the expense of the poorest population groups, they destroy also citizens in their own countries.

A last person in Switzerland I will mention. She has sponsored Business Crime Control for 5 years, because she felt ashamed about the criminal practices of Swiss industries and banks. Our
criticism of corporate crime in Switzerland may have been the main reason for this commitment, that in the last ten years or more we have been hushed up in this wonderful country with its strong
democracy and bank secrecy.

Therefore, I was very surprised to get this invitation. For a moment, I felt a kind of irritation about what I had experienced before. The experience I had made in the four decades dealing with
the subject of corporate crime, had made me sure, that I would never find any serious interest in crime-problems, where entrepreneurs, investors or corporate management itself are deeply
involved.

Now I hope once more times of isolation of corporate criminology, of clean and idealistic faculties and of the pure theories have passed. What we now need is more interest in applied sciences and
a closer relation between theories and practice.

Second Part

The legal corporations came, as I said, under the influence of the global competition ingredient and necessary parts of criminalized economy. But not all violations of social order are
criminalized. Dr. Mahathir Mohammed, a Malaysian prime minister, at the Annual Meeting of the IMF and World Bank in Hong Kong in September 1997 proclaimed. "Currency trading is unnecessary,
unproductive, and immoral. It should be stopped. It should be made illegal!"

But who should illegalize speculation in currency trading? Who could criminalize the murderous food speculation? The worst effect of the different versions of food speculation is the aggravation
of hunger in developing countries. The price bubble at the end of 2006 pushed 120 million additional people into poverty. Behind the façade of pinstriped respectability lurks misery and hardship
for millions of people. (Food Speculation - The Main Factor of the Price Bubble in 2008 - Briefing Paper by Peter Wahl – Ford foundation)

Both sides need each other and cooperate like trading partners within the legal sector. At conferences in the 1990s, I explained my methodological and theoretical approach and concept seeing
corporate crime and organized crime as two complementary parts of the same system. This explanation had no chance of being accepted by the representatives of our political and scientific
establishment. Nobody has, however, ever tried to refute it with empiric facts. The most known facts verify my theoretical concept.

In the words of Lauren Snider, Professor of Sociology in Kingston (Canada) it may be said, that corporate criminology was a kind of „academic Siberia”.(Mokhiber/Weissman, Corporate Predators,
p.25) There was an invisible wall between very few scientists, who were ready to see these two kinds of economic crime as a whole system and those, belonging to the majority, who saw in organized
crime simply a separate field with separate interests.

The latter argued that organized crime is abusing the lawful economy for money laundering. Cooperation in other fields was absolutely denied or overlooked.

However, many top-management criminal activities in the corporations within the last 15 years undoubtedly took place. Therefore in many books concerning corporate crime – for instance about fraud
– you read: „Management can control the opportunities for fraud through internal controls, good management, good policies, and good procedures.” (Silverstone/Davis, Fraud 101, Wiley 2006, p.4).
The same is maintained in papers from Transparency International about corruption. Theoretically, this assumption is correct. These books – and now I come to an important methodological
difference to my own researches – however give you only tools and expertise for keeping fraud and other kinds of economic crimes out of your own business and under control.

In any case, these are important aspects of a very important problem all managers are inevitably confronted with and have to solve. The question is, for example, what should be done if employees
steal things and ideas from employers. Here most of the resources of research in recent years have been invested. Even the audit firms like KPMG and PriceWaterhouse produce studies in corporate
crime, but in fact, they are studies concerning „breach of trust and contract” by employees to protect corporations.

This is – as might be seen immediately – not the suitable object, it is the wrong subject for researchers studying white-collar crime. I call these problems employee crimes, not corporate crimes.
These inadequate studies are paid for either by the corporation itself or by the audit-firm as part of their public-relation work for getting mandates from corporations. Only these have a chance
of receiving sponsoring.

On the other hand, the few scientists who engage in corporate crime research get no money for the necessary subject studies. In this connection let me give you a first impression of my own
theoretical approach. It is about the research into the illegal raising, procuring and accumulating of capital, the research into the illegal utilization and realisation of capital, and the
research into what I call the illegal securing of capital and business power and the research into the consequences of all these forms of corporate crime for the different parts of local,
regional, and national societies. Globalised markets, however, demand more and better international strategies, not just legal ones.

You can find only very few studies focussing on the most important problems of corporate crime. Beforehand a researcher of economic crime should ask how to control the controllers? It was Edwin
H. Sutherland in 1949, whose work „represented the first systematic study of corporate crime”. He found that his evidence did not “justify a conclusion that the upper class is more criminal or
less criminal than the lower class, for the evidence is not sufficiently precise to justify comparisons and common standards and definitions are not available”. However, he concluded that this
sample of corporations “violated laws with great frequency.” (Russel Mokhiber, Corpoorate Crime and Violence, 1989, p. 18)

Russel Mokhiber, the editor of the weekly Corporate Crime Reporter whom I visited in Washington, says, „Not until 1979, 30 years after White Collar Crime was published, did
anyone attempt a systematic in depth follow-up study. Sponsored by the U.S. Department of Justice, Marshal Clinnard and Peter C. Yeager rushed in to fill the gap in corporate criminological
research since Sutherland’s death. Today their Illegal Corporate Behaviour (written in 1989), together with White Collar Crime, is the cornerstone for future sociological research and study in
corporate crime.”(ibid p.18)

There can be no doubt that business power can more easily be abused by the private owners or main shareholders, their top-managers and supervisors than by subordinate employees. Their
management-floors are free of any democracy. Their limits could be and should be the law. In addition, we have known for a long time how strong the influence of the Corporations on the political
parties, single politicians and Members of Parliaments is exerted. Read the Article „How Lawless are Big Companies” by Irwin Ross (published in Fortune, Dec 1. 1980) Bosses of the big companies
can commit economic or professional crimes without any effective control and mostly without being sentenced or even accused.

Therefore, we have to ask who is controlling the controllers. In fact, that is the main question. When I was a student of political science and reading many books about the history of the
19th and 20thcenturies, mainly to find out the reasons for the two world wars, I found two convincing arguments: The crises, which lead to wars, are closely connected with economic
developments and various kinds of political reactions to overcome such crises.

However, when I wanted to know the reasons for these crises, I found only assumptions of overproduction and underconsumption as nowadays. In this context, only marginal attention was paid to the
expansion of colonialism and imperialism and the problems of globalizing the finance-capitalism. You can find nothing about the control of the bank-manager being involved in preliminaries of the
Great Depression or the Save and Loan scandal. Who was controlling Bernie Madoff. Who is controlling Joseph Ackermann today? The members of the supervisory board? That is self control and cannot
work.

Controlling of the owners or the top-managers in big corporations is a great problem for societies with a free enterprise system and democratically elected government. You well know, that this is
not only an economic, but also a political problem, that means, of the right balance of power.

For owner and manager controlling a corporation is and can only be self-controlling. That means a question of good will. Therefore, it is not a surprise to find many good books with guidelines
for fraud prevention and detection, and most corporations in recent years have installed systems of self-control, codes of conduct, monitor compliance, ethic programs and corporate governance.

Here many possibilities exist to fight against fraud and other kinds of abuse of economic or business power.

But why do we get every day more and more bad news from serious newspapers, broadcasters and television? They are about corruption, fraud-investigations in corporations, criminal bankruptcy,
corporate war crimes, money laundering, environmental crime, illegal production and export of weapons, modern forms of slavery and so on, showing a huge scale of crimes allegedly committed by
mafia organizations, not by the so-called white-collar criminals.

However, this only scratches the surface. Behind this surface lies the problem, what damage is done to the economy and to the masses of innocent taxpayers who are through social cuts made to make
up for the losses of bankrupt institutions, saved by government.

Many corporate misdeeds fall outside the narrow definition of a corporate crime. It is not only in the historiy of the 19th century that you find an important source of knowledge as to how
corporate crime works. When in 1991 in Germany the so-called „re-unification” took place, which reminds us more of the annexation of Austria in 1938, I founded the non-government organisation
„Business Crime Control” (BCC), because the unification was organised like an act of colonisation.

We should not forget, however, that the existence of the two parts of Germany was the result of World War II and of corporate crimes that favoured the rise of Hitler and the installation of the
fascist regime... Corporate Crime in the Republic of Weimar and in the so-called Third Reich would be a lecture of its own...

I mention this, because it is not only Germans have to pay regard to this fact. One of the most important results of World War II, laid down in the Potsdam agreement and even implemented in the
CDU-Program of 1947, was the great consensus that big industries and banks should be decartelized or socialized. In any case, the industrial conglomerates and the big banks should be controlled
by democratisation. In contrast to East Germany, this target was only partially realized in West Germany by the decartelizing of IG-Farben and the right of equal legal participation status of the
workers (and the trade unions) in management.

However, both sides failed in controlling economic crime, because neither the western capitalist democracies nor the communist bureaucracies were interested in fighting this imminent enemy of the
system. Corporate crime simply did not exist... Capitalism, growing in all social systems in the underground, was one of the main factors for undermining the planning economy. It was one of the
main factors undermining the social systems of the developed democratic societies. You can study it by analysing the economic crime cases within the financial system today. You can verify it by
studying the most well known cases of the social and ecological problems we have in the globalised capitalistic economy of the world.

After Nazi-Terror and World War II, I began to reflect on my life. As a child of an anti-fascist family in Nazi-Germany mainly since beginning of the cold war, which was also the beginning of my
apprenticeship as a toolmaker for 12 years, I became a conscious member of the working class and of a trade union. The policy of cold war forced everybody within one of the two systems to take
sides either for the simple concept of the democracy one was born into or accepting the system of the enemy on the other side of the wall.

I happened to grow up in what was called the better country... Still I became aware of the central conflict of capitalist economy even in a capitalist democracy. It is the conflict between the
private interest of investors and the duty of managers to make profit or the duty to guarantee social justice and a full democracy.

Here I learned that the criminal law marks the limits of systems, of any system. Governments in democracies and in dictatorships have to organize, what is called the „balance of power” and
majority rule. Since the rule of revolutionary communism in Russia competition was no longer only an internal problem of societies, it was also one of the two systems, opposing each other. The
very contrary social and economical methods and targets could only be balanced by repression of people who criticized the system and of military alliances from inside.

When this period came to its end, balance of systems no longer existed. After the communist system imploded, it was easier than ever before, that corporate crime, organized crimes, money
laundering and corruption made its way... Corporate crime had been hidden for four decades. In capitalist democracies, „freedom” was the magic curtain for economic criminals. In the communist
systems, it was the doctrine of classlessness without owning means of production, which served to hide criminal acts by cadres of the ruling class. Perhaps you know the Name Schalk-Golodkosky. If
not, you should know it.

Of course, there were always serious scholars who argued and still argue today, that corporate crime simply does and did not exist and cannot exist. In the words of Jeffrey Parker, Professor of
law at George Mason University Scholl of Law (USA), „Crime exists only in the mind of an individual”, which means, „Since a corporation has no mind, it can commit no crime.” (Russel Mokhiber /
Robert Weissman, Corporate Predators – the hunt for mega-profits and the attack on democracy, Common Courage Press, Monroe, Maine, 1999, p.2)

It is one more possibility to hide or play down the problem. Corporations are not persons, have no mind, therefore they should not be seen or be treated as persons. I mention this, because the
methods and kinds of denying corporate criminality made it under the circumstances of Cold War in East and West nearly impossible, to discuss openly and above suspicion the crime of capitalists
and other ruling bodies.

In addition, it was not possible, to find an acceptable definition of white collar, economic, business or professional crime. Now that the socialist camp no longer exists, it is simply a question
dominating capitalist societies including Russia.

Edwin H. Sutherland, father of the modern economic-crime research wrote in 1949, „Businessmen are not only in contact with definitions which are favourable to white collar crime but also they are
isolated from and protected against definitions which are unfavourable to such crime. Most of them, to be sure, were reared in homes in which honesty was defined as a virtue, but these home
teachings have little explicit relation to business methods. The persons, who define business practices as undesirable and illegal, are usually called ‘communists’ or ’socialists’ and their
definitions carry little weight”. (Edwin H. Sutherland, White Collar Crime, p.250)

In 1990, I published a book with the title “Kapital-Verbrechen” (Capital-Crime), in which I analysed my researches concerning the interest of political parties, trade unions, journalists and
scientists in corporate crime. The result was that there is a big blind spot in the minds of the political and economical class and in the minds of journalists and scientists.

To change this, together with friends and some experts in macro-economy and environmental-crime, I founded the non-government organisation Business Crime Control that also pays attention to civil
and human rights, violated by corporations. As chairperson of BCC, and in cooperation with some of my friends I tried to work out historical and theoretical papers on criminal economy especially
committed by big business-owners and top-managements.

Our main intention was to open the eyes of the public, the potential and real victims of corporate crimes. They are, as still Sutherland remarked, „seldom in a position to fight against the
management of the corporation”. „Consumers”, he said, „are scattered, unorganized, lacking in objective information as to qualities of commodities, and no one consumer suffers a loss in a
particular transaction which would justify him in taking individual action. Stockholders seldom know the complex procedures of the corporations they own, cannot attend annual meetings, and
receive little information regarding the policies or the financial status of the corporation. Even if stockholders suspect illegal behaviour by the management, they are scattered, unorganized,
and frequently cannot even secure the different dangers of corporate and organized crime, money laundering and corruption”.

Third Part

Now let me give you first a selected overview to the problems and structures of an early study on corporate crime. I am pleading for attention in the revolutionary work of Edwin H. Sutherland.

Second, I will procure you an impression of the organised editor writing, in which Russel Mokhiber (Washington D.C.) in the tradition of Sutherland and Ralf Nader as editor of the weekly
“Corporate Crime Reporter” makes a very important fighter against corporate crime.

Edwin H. Sutherland was born 1883 in Gibbon, Nebraska, U.S.A. He died in 1950 in Bloomington, Indiana. He was an extraordinary American sociologist and became one of the most influential
criminologists of the twentieth century. He defined white-collar crime „approximately as a crime committed by a person of respectability and high social status in the course of his occupation”
and „formulated a general theory of crime and delinquency”, called „differential association” that explains how deviants come to learn the motivations and the technical knowledge for deviant or
criminal activity.

It has often been assumed that his most famous empirical study was written in the years after the big crash in 1929, though his book was only first published in 1949 under the title: White-Collar
Crime. His book is not without the typical problems scientists have in dictatorships, when they are dealing consequently with the abuse of economical and political power.

Fact is: The editors demanded to have the names of corporations eliminated from the book. Some of them were called „criminal” although they had not been dealt with under criminal statutes.
Indiana University shared this view because they feared alienating some of its wealthy business sponsors. White Collar Crime was published in the year of the official beginning of the
so-called cold war, which meant that McCarthyism was rife in the USA and makes understandable that the version first published in 1950 was cut.

Now I will give you a kind of abstract of Sutherlands famous work.

Sutherland studied not only sociology, but also political economy. That is, I think, beside of the real economic depression with its worldwide effect, which brought the Nazis in power in Germany
very important to understand Sutherland’s critical view on the upper class and their management of power. He called it also „the criminals of the upper world”. Before he had risked this change of
paradigm he had, and that is important to understand its special interest, for a long time dealt with the so called „blue collar crime”, the crime of the poor, the homeless, „the mill-street
offences”, the working class.

It was not the theory of Karl Marx, and not Christian socialism, with which he was familiar and had perhaps some influence on. He had studied political economy and was teaching for 6 years
at a Baptist College in Liberty (Missouri), where he had occupied the John E. Franklin Chair, established by a banker in 1913 to foster Christian socialism. No, he got his main impulse by the
real behaviour of corporations at the time of the crises in the late twenties and early thirties of the 20th century. It was the real capitalism and the crises caused by financial
speculation, lawbreaking and other forms of forced enrichment which inspired Sutherland to look at the behaviour of big business.

The answer of democratic politicians in the USA was Franklin D. Roosevelt and his New Deal. It was a natural reaction, that Sutherland focused his view on the role of corporations. However, the
innovation compared with the criticism of the communist party was more effective. He did not criticize capitalism, but the crime of the powerful, the owner and manager of the 70 biggest
corporations in the USA. His study was the beginning of a scientific revolution in criminology. Therefore, it is not exaggerated, that some experts compared Sutherland with Copernicus, other see
him as the Einstein of social sciences.

In this context, it is not necessary, to have a look at the New-Deal-Policy, but I will give you only an impression of the topicality of the discussion in the 1930s of the last century. I only
quote a sentence by President Roosevelt. „Do what we may to inject life into our ailing economic order, we cannot make it endure for long unless we bring about a wiser, more equitable
distribution of national income ... the reward for a day’s work will have to be greater on average than it has been and the reward for capital, especially capital that is speculative, will have
to be less.” Any chancellor in a member-state of the European Union or US-President Barack Obama could have said that yesterday. However, they hardly do.

Sutherland altered – as you can easily prove – „the studies of crime throughout the world in fundamental ways focussing attention upon a form of lawbreaking that had previously been ignored by
criminological scholars.”(Gilbert Geis / Collin Goff, Introduction to White Collar Crime, S.IX) „He ridiculed theories of crime which blamed such factors as poverty, broken homes, and Freudian
fixations for illegal behaviour”. He noted, however, „that healthy upbringings and intact psyches had not served to deter monstrous amounts of lawbreaking by persons in positions of power”.

Sutherland was also the first who „documented in detail derelictions by corporations, concluding that their ‘rap sheets’ (that means the Record of Arrest and Prosecution) resembled, at least in
length and frequency, those of many professional predators, such as con men and bank robbers, persons who by choice prey upon the public”. (Gilbert Geis/ Colin Goff, Introduction of White Collar
Crime)

This altered point of view on crime focused at the beginning especially „on such representative corporate offences as antitrust violations, false advertising, theft of trade secrets, and bribery
in order to obtain special privileges”. Sutherland insisted, „that the white-collar behaviours he detailed were criminal, not civil, offences”. He said, „that the persons, who committed them
ought to receive the same kind of scorn and punishment that attends other kinds of property and personal crime”.

This point marks the central unsolved problem of capitalistic democracies and constitutional states.

The arguments of those few experts, who assisted Sutherland’s targets without any reservation, have always been today the same: White-collar-crime is a „cancer which is eroding society from the
inside”. It is undermining the public trust and turns the idea of fair competition into a war of all against all, ending with monopolized markets (what in fact no market is), monopoly prices and
political corruption.

It violates the system of public control, makes whole societies corrupt and destroys the financial order. It makes last but not least the implementation of laws, made to control the abuse of
economic power, impossible. In the end this means, that corporate crime destroys the foundations of capitalist democracies.

The socialist societies in communist countries were also undermined by economic crime. Any underground economy is, as we can say, if we are open to learn from history, ending in a general
economical and political disaster. Neither capitalism nor socialism, nor any other political and social system have a chance to survive without controlling the power of their rich and mighty
members, may be in their high position by free elections or by god, as people in the middle ages believed.

One of the main problems for scientists is to find the best definition of a term. Best definitions describe exactly frontiers, bounds, and limitations as do or (ought to do) laws. We should
accept that the utter limit of any political and economical system is the criminal law. Therefore, we have the endless discussions what corporate crime means. If it is the abuse of power, then we
must follow Sutherland, who said, abuse of power constitutes a kind of behaviour of uppermost importance, deserving special scrutiny.

By Sutherland’s account not only comprises tax-evasion or money-laundering, corruption or commercial exploitation, illegal union breaking tactics, wages below permissible limits, unsafe working
conditions, but also „a murder committed by a manufacturer in strike-breaking activities would be a white collar crime.”

Geis and Goff note in their introduction three contributions of the impacts of White Collar Crime:

„First, the swirling controversy about the proper definition of the subject matter, which helped refine the scientific boundaries of the realm of white-collar crime;

Second, the accumulation of scholarly work spurred by Sutherland’s pioneering monograph; and

Third, the vigorous debate about the causes of crime, which was raised to a much higher level of sophistication by Sutherland’s work.” (p.XXIX)

Let us end this third chapter with a short view on the influence of Sutherland’s studies and research focus on young scholars. In 1953, Donald R. Cressey published „Other people’s Money”. In
1952, Marshal Clinard carried out an investigation of violations of the rules of the Office of Price Administration during the Second World War by the black market. Frank E. Hartung studied the
White Collar Offences in the Wholesale Meat Industry in Detroit.

After an interval of some years, caused by the McCarthy period of cold war, a new wave of research-works can be noticed in the 1980s.

This great surge has to be seen in the context of the environmental-movement and the critics in economic-growth. It began in the early 1970s with the famous study by the Club of Rome. In the
1980s, it was then transformed into mighty ecological and peace movements and in political parties focussing on protection of environment and consumers, that means food watch, pharmacy control
and many other most important aims that more and more people missed in the practice of corporations and in the programs of labour unions and labour parties.

This was the time when Ralph Nader became famous in Europe. One of the hundreds or thousands of his writing co-fighters is Russel Mokhiber, the editor of the weekly “Corporate Crime Reporter” (I
mentioned) and author of many very important books about „Corporate Crime and Violence” with many analysed cases about „Big business Power and the Abuse of the public trust”. One very popular
pocketbook has the title „Corporate Predators – The hunt for Mega-Profits and the attack on Democracy”, co-author is Robert Weissman. (Common Courage Press, Monroe Maine 1999)

Mokhiber’s orientation is Sutherland’s definition of law. As a lawyer, he has specialized in corporate crime. He says „Many corporate misdeeds that fall outside the narrow definition of crime as
‘confiction’ qualify as crimes in a more fundamental sense of the word in that they contain the essential characteristic of crime as defined by Sutherland: that is, ‘behaviour which is prohibited
by the State as an injury to the State and against which the State may react, at least as a last resort, with punishment.’” (Russel Mokhiber, Corporate Crime and Violence, 1989, Overview p.11)

According to Marshall Clinard and Peter Yeager, this means that „criminal laws represent only a part of a larger body of law; there are in addition administrative and civil laws.” They are not
applicable to the ordinary criminal offender; they are for the most part the manner in which corporate violations are handled. Violations of these civil and administrative laws are also subject
to punishment by the political state. From the research point of view, then, corporate crime includes any act punished by the state, regardless of whether it is punished under administrative,
civil or criminal law.” (Ibid p.11-12)

Fourth Part: Information on Business Crime Control

Finally, I will give you some information on Business Crime Control. I do not simply use the term Business Crime. According to our understanding, it includes corporate and economic crime, but
also occupational and professional crime. Briefly, you may refer to it as the famous idiomatic expression indicates: „business as usual”. I think, most people say today, when reading their
newspaper or watching television news: „Business Crime as usual”.

If more and more people „whose duty is to make the law or enforce the law, now make money from breaking the law”, as a Thai group of organized crime researchers describe the situation in their
country put it, then we have a crisis of the whole world system that should force scientists, managers, and politicians to organize a fundamental reform. (Pasuk Phongpaichit, Sungsidh
Piriyarangsan, Nualnoi Treerat: Guns, Girls, Gambling, Ganja - Thailand’s illegal economy and public Policy, Silkworm books, third edition 2000, p. VIII)

However, when those responsible people are not willing or able to manage the necessary big change of the system, the frustrated people will take the change into their own hands. The worldwide
occupy-movement is though only a weak form of protest, not a revolutionary movement, but this movement should be seen as a warning.

Let me now give you my history-bound review of the present global situation. My thesis is that there has been business crime from time immemorial whether as gangs of robbers or states. Business
was made according to set rules. Business crime destroys internal structures within states and societies, but it is tolerated as a source of wealth if it happens at the expense of out-group
members. As business crime, European colonialism was part of previous and primitive accumulation, the prerequisite for capitalism.

The USA, which grew out of colonies, developed a specific form of anti-colonial imperialism, the democratic dollar imperialism that is well known today. This new form of colonisation, the
European Union, burdened by its own colonial legacy, has developed only in the twentieth century.

Since the end of the bi-polar world and the Cold War between the antagonistic systems, we have a world competition in imperialistic politics and strategic investment. The basis of it is now
international finance capital, which has superseded both nationalist imperialism and its opponent, Eastern bloc communism. That super cession has enabled entry to a higher stage of imperialist
development, which we call „globalisation”. Globalisation depends more and more on a criminal global economy, which is undermining the security policies of individual nation states and their
social policies, too. It is also destroying the bigger political, economical and ecological units.

What is to be done? The right answer is the struggle for world social policy and world domestic policy. However, one more answer is needed: the struggle against corporate, in a more extensive
sense, against business crime. This would be – as I think – the most effective rescue umbrella we could open over Europe and the other parts of our world.

Let us have a look at single corporations. They are all combinations of a permanent optimized technological and personal structure. The first laws these subsystems are subjugated are the laws of
the – theoretically free – market. The ideal structure of a free market is named fair competition. However, free markets do not exist. They have never existed. They are ideological constructions.
Perhaps they sometimes exist for a short period on a small local and transparent basis. However, national and global markets are monopolized and without social control.

Their function is to fight free competition, to gain a competitive advantage by abuse of power, by lawbreaking. Here we are reaching a point of no return.

The uttermost competition advantage is the systematic breaking of laws. Not only the laws of the state, also the laws of markets and – what is the premise – the moral laws. No fair and
law-abiding capitalist or manager is able to win a competition against corporate predators. Therefore the system itself needs for its survival more than the laws of market, it needs the laws of
the State, needs civil laws and criminal laws, and – where democracy has no right to control the decisions of the economic-class – the societies need whistleblowers and have to protect
them.

All corporations act between democracy and crime, between legal an illegal practices to raise capital and to realize profit. The international competition is in fact a special kind of global
warfare. The main targets are to conquer markets and switch off (with invisible hands) their mechanisms by getting the indirect control on politics. If it fails, cooperation with criminal parts
of society and parts of the military tends to establish a dictatorship to protect means of production in private hands. What is called freedom of societies is in fact the freedom for investors.
The more freedom they are given the more freedom democratic societies lose or are forced to give up.

For twenty years now, Business Crime Control (BCC) has tried to sharpen the public awareness. What we are aiming at is to define the main terms, used in discussions dealing with
corporate crime, organised crime, corruption and money laundering. We support NGOs and individuals also by awarding a prize to encourage civil protest groups, whistleblowers, journalists and
scientists to inform the public about illegal or criminal machinations of „persons in powerful positions in the society and the arrangements that got and keep them there”. (Gilbert Geis &
Collin Goff, Introduction in Sutherlands White Collar Crime, Yale University Press 1983, p.XXX)

A very important point is the concern with victims of the corporate crime. Nearly every day we get reports and documents on serious competition crimes, banking crimes, environment crimes, justice
crimes, but have only the possibility to publish the case. But it happens, that we are in the end also victims, because some attacked corporations or persons send a temporary injunction of the
court and you have to pay a lot of money for administrative fine, sometimes you will be accused.

We organize conferences and speak about the problems caused by corporate crime, hoping that human beings are rational and understand and act in their own interest to stop, wherever they can, the
abuse of business power and the public trust.

The most important point of our work is to develop a systematically critic of economic criminality. There I will end with a few definitions I extracted from the experience of the past twenty
years.

First, we have a clear, objective difference between the criminality of people, who possess capital, and the working class, who have nothing to sell but their labour. Therefore, I speak of
capital-crime and of working-class crime.

Second, we see three stages of capital crime: 1. the illegal forms of previous accumulation, 2. the criminal forms of realisation of profits, and 3. the criminal forms of controlling the
political system and of abusing democracy to protect abuse of private property.

In corruption, we see a function of corporate and organized crime, a criminal form of marketing and a private anticipated deregulation.

Organized crime is a complementary system of corporate crime; corporate crime is the complementary system of legal economy.

We don’t see the necessity of a law-and-order state, because we have as a first big step an alternative that should be tested. I call it crime-preventive co-determination. It means the
implemented right of independent, qualified members of civil society (it could be an examination board) to verify the big projects of corporations whether they are in compliance with what the law
requires or not.

The aim of our NGO is to raise the level of awareness about the illegal economy, the involvement of public servants and politicians, and the resulting implications for the economy, politics, and
societies worldwide. I hope I could stimulate the following debate on what should and can be done about people in high positions with capital and connection outside any democratic control.